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Restaurant Project Dependencies Analysis

NEC 4 Stage 2 Long Question

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0% found this document useful (0 votes)
87 views2 pages

Restaurant Project Dependencies Analysis

NEC 4 Stage 2 Long Question

Uploaded by

chowyattim
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Q5.

The project is a ‘drive-through’ fast food restaurant with much of the


construction undertaken off Site in modules. The work has been procured
under ECC Option A and secondary Options X2, X6, X7 and X20 are
incorporated.

Time is critical and the Client wants the restaurant open as soon as
possible. The contract strategy contains both delay damages and a bonus
for early Completion.

The Contractor has just submitted its second programme which shows
that planned Completion will be after the Completion Date due to delays
in the factories manufacturing the modules. The Project Manager expects
that the Client will be extremely concerned by this.

a. What should have occurred before the programme (showing


that the Contractor will be late) was submitted? Also, should
the Project Manager accept the programme?

[5 marks]

A few months later the Contractor has brought the project back on track.
Its latest programme shows planned Completion prior to the Completion
Date. The Client sees the programme and wants to add in additional
landscaping works which will be on the critical path.

b. What would the effect be on planned Completion and the


Completion Date by including the additional work and which
clauses confirm this?

[3 marks]

The Client decides not to instruct the additional work but wants
confidence in the earlier Completion by the Contractor. This will allow the
initial staff training and familiarisation to be planned.

c. Can the Completion Date be brought forward and can this be


forced upon the Contractor? Is this a compensation event?

[4 marks]

The original Scope stated that the Client wanted to use the restaurant to
train staff before Completion. The staff are now on Site much to the
annoyance of the Contractor. The Contractor notifies a compensation
event.

d. Is this a compensation event? Would it be a compensation


event if the original Scope did not mention the requirement?

[6 marks]

Towards the end of the project, the Contractor has a number of problems
with Subcontractors and ultimately the project is two weeks late. The
specialist installing point of sale equipment and safes (employed by
the Client) has a small window of opportunity when it can do the work. If it
does not undertake the work in the next week it will be six months before
it is back in the same country.

e. If the specialist does the work after the Completion Date


(the Contractor is two weeks late) is it a compensation event?
What steps might the Project Manager take to mitigate the
impact?

[7 marks]

Common questions

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If the Project Manager accepts a program showing planned completion after the Completion Date, it could be interpreted as tacit acceptance of the delays and might diminish the Client's stance in applying delay damages. However, this does not alter the original Completion Date unless a compensation event is invoked and formally reflects the change. The Project Manager must thus consider the broader contractual implications before acceptance .

A Project Manager might prevent staff training from occurring before completion to avoid introducing non-essential personnel during active construction activities, which could interfere with workflows, increase safety risks, or complicate site management. Furthermore, unless specified otherwise in the contract, such unplanned activities might not be covered, potentially triggering compensation events due to the disruption .

Delay damages serve as a financial incentive for the Contractor to adhere to the scheduled Completion Date, ensuring accountability for time management. Conversely, early completion bonuses motivate the Contractor to beyond merely meeting deadlines, aligning with the Client’s interest in an expedient project launch. Together, they create a balanced approach to risk and reward, encouraging efficient and timely completion of the project .

By deciding not to proceed with additional work, the Client potentially prevents disruptions or extensions of the critical path, thus avoiding linked increases in timeline and costs. This decision reflects strategic planning within the contract's flexibility, optimizing resources and maintaining the proposed schedule without triggering compensation events related to new tasks that might delay completion .

ECC Option A (a priced contract with activity schedule) is suitable for modular construction as it provides a clear financial framework with limited risks for the Client regarding cost overruns, offering predictability. This contract type encourages detailed planning and scheduling, essential for projects with offsite module construction that require precise coordination and timing due to factory-based manufacturing processes .

The delayed work by the specialist is not inherently a compensation event as the Contractor's responsibility is to complete the project on time. However, the Project Manager should take steps to mitigate the impact, possibly negotiating rescheduling with the specialist or considering alternative measures to ensure work can be completed without significant additional delays or costs, to maintain the timeline as much as possible .

Incorporating additional landscaping works in the critical path leads to an extension of the planned Completion date since these works directly affect the project's timeline. However, under ECC Option A, clauses related to compensation events would need to be considered to determine if the Completion Date should also be formally changed to accommodate this extension, emphasizing the importance of Clause 60 which covers compensation events .

Before submitting a program indicating delayed completion, the Contractor should have proactively communicated and discussed the delays with the Project Manager, identifying reasons for the delays and any potential solutions to mitigate them . The program should have undergone a review process where both parties discussed the implications of the delays on the project timeline. The Project Manager should carefully evaluate the program against contract terms before deciding whether to accept or reject the program submission .

The presence of staff on-site is not a compensation event since the requirement was explicitly stated in the original project scope. If this had not been included, it could potentially become a compensation event as it might constitute an unforeseen constraint impacting work progress, affecting the Contractor's costs and timeline as per the compensation events in Clause 60 .

The Client cannot unilaterally advance the Completion Date without the Contractor's agreement, as such action would alter the agreed project schedule and likely constitute a compensation event under Clause 60. Additionally, any formal advancement would require a mutually agreed upon evaluation of impacts, reinforcing the necessity of consensus for contractual amendments .

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